Quilter has completed the sale of its ‘Single Strategy’ asset management business Old Mutual Global Investors (OMGI) to the management team and funds managed by private equity firm TA Associates. The transaction was originally announced on 19 December 2017.
The total consideration for the acquisition has been confirmed as GBP583 million, comprising upfront cash consideration of GBP576 million and an additional GBP7 million of deferred consideration. The deferred consideration will be fully received by 2021 at the latest as surplus capital associated with the separation from Quilter plc is released in the business. This deferred consideration is not subject to performance conditions.
Quilter says it is making good progress on separating its retained Multi-asset business from the Single Strategy business sold as part of the OMGI Transaction and continues to expect to incur aggregate costs of approximately GBP20 million in respect of the establishment of the standalone Multi-asset business. As expected when the transaction was announced in December 2017, Quilter plc and the Single Strategy business will continue, for a period of up to three years, to provide commercial services to each other under formal transitional service agreements.
As previously stated, the Board of Quilter will consider a special distribution by the Company to shareholders from the surplus sale proceeds from the OMGI Transaction, having taken into account, inter alia, the repayment in full of the GBP300 million senior unsecured term loan (which repayment will be made as soon as practical), the costs associated with undertaking and completing the OMGI Transaction and the costs associated with the establishment of the Multi-asset business.
Richard Buxton (pictured) CEO, OMGI comments: “We are thrilled to have reached this significant milestone and are incredibly excited to start the next stage of our journey. With the backing of TA Associates, I have every confidence that we will grow substantially from here. We are now preparing for the next big development: renaming the business later in the year. We look forward to sharing more information on this in due course.”
“As ever, our priority remains running distinctive, genuinely active funds. In my view, volatility is set to make a comeback as central banks end the extraordinary monetary policy experiment of the last decade; we are committed to helping clients navigate this unprecedented market environment.”
Christopher Parkin, managing director at TA Associates, adds: “Old Mutual Global Investors’ single-strategy business is among the UK’s fastest growing retail and institutional asset managers, and we believe the firm has tremendous potential to capitalise on strategic opportunities, both in the UK, as well as internationally. We are very excited to begin our partnership with Richard and the OMGI team.”